Empirical Study About The Impact Of City Level On House Price Changes

The real estate industry is the foundation of the national economy and pillar industry, house price is a barometer of the real estate industry development. Among the many influencing factors, as a concentrated reflection of the urban comprehensive strength, city level is a very important but often neglected factor. About how the city level, as a kind of endogenous factors, impacts on housing prices, there is little literature involved. Based on the theory of city level difference, this text summarizes four principles and eight factors of influencing the city level, and according to the four quadrant and three sector model, we put forward the theoretical basis of the paper, and perform further analysis on the theoretical mechanism.Firstly, this paper analysis the house characteristic of the city level difference. Based on the 2005-2012 as the research time, with 40 key cities as the research object,this text selects the following six influencing factors as the index of city level difference: municipal district population, built up area land, per capita GDP, the local finance budget spending, the city road area and real estate development, divide 40 key city into three categories with SPSS cluster analysis method. On the babis, we make statistical analysis on the levels of real estate, prices and housing price to income ratio for further.Secondly, On the basis of theoretical analysis and the present situation description, this paper makes empirical study on how the city level effect price changes. From the market and administrative principles(GDP, fiscal expenditure), quality principle(transportation cost, human capital), potential principle(expansion potential and development investment) three levels, this paper establish three panel model for all kinds of city and 40 major cities respectively, and use EVIEWS to make empirical analysis with data from 2005 to 2012, at the same time, make comparison and analysis for the empirical results of all kinds of city.Lastly, the empirical results show that: for the effects, in addition that transportation cost is negative, there is a positive impact for the other factors; Under different urban level, the extent on the impact of various factors on house prices are not identical. Combining the feature of price changes under different level city, this paper put forward policy suggestions of regulating the real estate market and prices for all kinds of citys.